Africa’s Big Boom

Africa is undergoing unprecedented economic growth, which is likely to persist, given that it is based on structural geographic and demographic factors. But Africa’s national governments still face significant challenges, particularly when it comes to supporting small and medium-size businesses.

PARIS – Africa is undergoing a period of unprecedented economic growth. According to The Economist, six of the ten fastest-growing countries in 2011 were in Africa. Average external debt on the continent has fallen from 63% of GDP in 2000 to 22.2% this year, while average inflation now stands at 8%, down from 15% in 2000. This positive trend is likely to persist, given that it is based on structural geographic and demographic factors, such as rising exports, improved trade conditions, and steadily increasing domestic consumption.

But Africa’s national governments still face significant challenges, given the wide variety of factors at play in each country. Economic characteristics vary significantly by country, depending on, for example, whether a fixed or floating foreign exchange regime is in place, and which natural resources the country controls.

As a result, prospects also differ by country. Although the average annual GDP growth rate for the entire continent has been forecast at roughly 6% in 2012, South Africa’s economy is expected to grow by only 3.6%, while Côte d’Ivoire is expected to grow at a rate of 8.5%. In order to tailor national economic policy effectively, policymakers must identify the drivers of – and barriers to – growth in each country.

The indices measuring this growth are totally wrong-GDP,FDI and all this percentage.The macroeconomics might look good to the western world because they bring in so little and make so much without giving back to the country they are taking so much from.Africa is not growing in real terms,poverty is growing,war is rampant and the western world are fuelling this by their rush for the natural resources. Corruption is so rife.The families are not growing and aggregate demand for goods that improve qualities of life is not growing. Malaria,tuberculosis and other infectuions are killing lot of people.No roads,no water,no power and infrstructure and how can anybody call this growth.My idea of growth is redistribute income fairly and justly among your people,provide for their basic needs,provide better education and improve standard of living we can then talk about growth. GDP and other indices are just figures and percentage that translate to nothing. I am an African and i want my kids to live in a continent that can compete with the rest of the world in positive indices like infant and maternal mortality rate,competitiveness of the country,standard of living of his people and quality of life.

Africa's undeveloped infrastructure and increasing natural resource discoveries makes it a virgin land to till. Europe and the West is already saturated with fully developed infrastructure that would remain a dream for Africa in 50 years. Whilst it is inconceivable for Europe and the West to ever dream of economic growth rates of 10% or more, Africa can afford to sky-rocket on that because the room for grow is simply too large.

What we need therefore is as the writer said, "accountable" governance and vigilant law enforcement authorities to ensure that the growth as it occurs, is fairly shared amongst all stakeholders. For smaller businesses like ours, seeking funding here and partnerships in Africa will certainly help us catch a share of that growth.

Let's keep exploring for funding sources that will help us set up factories in Africa.

The biggest problem, and the main reason we cannot find a solution for the global crisis is that we still view and look at things in isolation, we either cannot or refuse to see the full, global picture.
Thus we focus on "emerging markets", China and India, or now on Africa, regions and continents that were either suppressed, or were dormant up till recently and now started to catch up to the more developed part of the world.
But it does not mean that system they use, copying basically the western model is a good one, it simply means that from the level they used to be before they have a lot of growth potential.
But looking at the global picture these regions or continents have no chance of avoiding the problem the western part of the world is already facing, since the model, the system itself is faulty an unsustainable.
So on paper China is still growing using previous momentum, India is already slower, and the same for South America, and of course from the almost zero level Africa can produce spectacular results until they hit the same wall everybody else is hitting.
Constant quantitative growth is simply impossible to maintain, it is unsustainable since it does not suit the system we exist in.
The world reached a certain maturity, like a child when finishing growth, and now instead of expansion, quantitative development, a different, more mature, more qualitative development has to start.
When a human being finishes growth, it happens gradually, some body parts, limbs still grow for a while, but the body in general stops growing and has to transform to a different kind of function.
This is what is happening to humanity today, and until we understand this, until we stubbornly push, urge further quantitative growth, basically we are promoting cancer in this single, interconnected body endangering ourselves and the whole environment we exist in.

Interesting comment.
I do agree to the point, that Africa has to follow its own way to growth. Detached from, especially, the european continent.
Africa is, using a figure of speech, driving on another highway in another environment at another level of speed.
Whether or when a growing economy in africa will face decelerated growth or even a "wall", is of no interest right now. Or at least of another interest than it is for the european countries. They sure can learn from the crisis the europeans are confronted with right now.

Important is, that african decision makers, the politicians as well as the businessmen, absolutely have to think of longterm strategies for the continent or for their region of countries that are related to each other in an economical and cultural way.

I really agree to your last point about that we have to leave the path of quantitative growth.
I can´t say whether it is possible to extract this engine from the current, global system.
But, as an example, there is a chance for the african continent to make it better.
They should try it - at least.

New Comment

It appears that you have not yet updated your first and last name. If you would like to update your name, please do so here.

Pin comment to this paragraph

After posting your comment, you’ll have a ten-minute window to make any edits. Please note that we moderate comments to ensure the conversation remains topically relevant. We appreciate well-informed comments and welcome your criticism and insight. Please be civil and avoid name-calling and ad hominem remarks.

PS OnPoint

The Mueller report in America, along with reports of interference in this week’s European Parliament election, has laid bare the lengths to which Russia will go to undermine Western democracies. But whether Westerners have fully awoken to the threat is an open question.

Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. If your email exists in our system, we'll send you an email with a link to reset your password. Please note that the link will expire twenty-four hours after the email is sent. If you can't find this email, please check your spam folder.